Buy Alert: Sturm Ruger & Co. (RGR)

By Jim Pearce • November 15, 2016

TRADE INSTRUCTIONS
Date: November 15, 2016
Name: Sturm Ruger & Co.
Symbol: RGR
Type: Open
Limit: Buy below $54

TRADE TARGETS
Holding Period: 6 months
Target Return: 10.7%
Annualized Return: 21.4%
Target Price: $59.80
Stop Loss Level: $46.50

TRADE RATIONALE
Sturm, Ruger & Company designs, makes and sells firearms through independent wholesale distributors to the commercial sporting market. The Company operates through two segments: firearms and castings. The firearms segment makes and sells rifles, pistols and revolvers to a range of federally licensed, independent wholesale distributors located in the United States.

Our Rapids Profits Matrix triggered this buy alert when RGR’s share price plummeted last week after Donald Trump’s surprising victory in the U.S. presidential election. Gun sales had been up this year due to fears among gun owners that a Clinton administration might toughen gun sale laws in the future. But now that it appears the NRA has less to worry about with a Republican in the White House, gun sales are expected to drop.

I’m not sure if I buy that logic, but I do know this stock looks cheap based on its very high earnings yield and return on total capital. The company reported strong earnings two weeks ago which pushed its share price above $64 before plunging below $48 last week. It’s gotten a nice bounce off of that low, but is still well below its 50DMA so it should get back above $57 before encountering much resistance.

Note: This stock is optionable

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black arrow

11/15/16 ‐ 3:39pm ET November 15, 2016 at 3:39pm ET

Hi Jim,
“Locked and loaded” :^) at 52.70. Since I a under 70 miles from the CDN border I am familiar with their products :^) Think I will look over some options for a smaller account.

Thanks for another selection that I think will easily meet your goals!

Carol

11/15/16 ‐ 3:53pm ET November 15, 2016 at 3:53pm ET

I noticed changes in the “stop loss” on most of the stocks while I was placing my order for Sturm Ruger today. I am a neophyte so please forgive my ignorance. I have adjusted stop losses on all stocks that have changed. I’m guessing this protects the gain?

Jim Pearce

11/15/16 ‐ 4:38pm ET November 15, 2016 at 4:38pm ET

Hi Carol. You are correct. Once I have achieved my target return I raise the stop to lock it in.

black arrow

11/15/16 ‐ 5:51pm ET November 15, 2016 at 5:51pm ET

Hi Carol, The fact you noticed changes is very good. Its not negative to be at the start of a journey like this, its the only place to start. Some day you will look back and be pleased you have started this and enjoy the knowledge you have acquired.
Welcome Aboard

the phantom

11/15/16 ‐ 11:47pm ET November 15, 2016 at 11:47pm ET

Jim,
Just wondering how you got in RGR at 50.75 on 11/15 when the low price for the day was 52.75 Did I miss something or is this a mistake in the open trades table? Anyway I am pleased so far, I have taken all the trades since the beginning of October and have been able to cash in 3 of them (BMA, VLO,, DLPH) at or above your target return %. Will get in RGR tomorrow(did not see your alert on time). Keep the profits rolling in!!. Thank you and good night.

Jim Pearce

11/16/16 ‐ 8:43am ET November 16, 2016 at 8:43am ET

That is due to a glitch in the way our data feed works. It automatically pulls the most recent closing price when we add a new stock to the portfolio, and since I issued that alert yesterday afternoon it grabbed the closing price from the day before which was $50.75. We have to manually update it each time that happens, so it will be corrected later today.

Alpha_Dog_510

11/16/16 ‐ 9:42am ET November 16, 2016 at 9:42am ET

RGR Filled @ $52.40 in it to win it.
Thank You, Jim

Larry Johnson

11/16/16 ‐ 9:50am ET November 16, 2016 at 9:50am ET

“Hit the target” at $52.50.
I’m in.

Ado Casagrande

11/16/16 ‐ 5:15pm ET November 16, 2016 at 5:15pm ET

i hit the target as well…52.50….WAAAHOOO!!!!!

Dramatic License

04/03/17 ‐ 10:54am ET April 3, 2017 at 10:54am ET

RGR with the big move today! Looking nice.

Jim Pearce

04/03/17 ‐ 11:54am ET April 3, 2017 at 11:54am ET

Yes it is! I don’t see any news for RGR today, but I did see that the FBI reported background checks in March were up nearly 9% over February (https://www.fbi.gov/file-repository/nics_firearm_checks_-_month_year.pdf/view) so that may be the reason why.

Janis Bell

04/11/17 ‐ 5:34am ET April 11, 2017 at 5:34am ET

How much longer will we be holding this?
My stop loss order GTC expired yesterday (90 days). My account shows it up today just over 9%, to 59.90, still short of the 59.80 target price by nearly $3 so I won’t take profits but don’t know if I should redo the stop limit order at the initial 46.50 level or raise it to my purchase price of $51.80.

Jim Pearce

04/11/17 ‐ 9:22am ET April 11, 2017 at 9:22am ET

The target holding period for RGR expires on 5/15 (‘entry date’ of 11/15 with 6 month ‘target period’ as reflected in the portfolio table https://www.investingdaily.com/systematic-wealth/portfolio/), so unless it achieves its target price prior to then it will remain in the portfolio for another month. Of course, you are free to do with it what you like, including entering a new stop just below its current price which would be tantamount to a sell order if it drops in price but would still allow the possibility of further gain if it continues going up.

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